Israeli PM offers conditional settlements freeze

Israeli Prime Minister Benjamin Netanyahu speaks at the opening of the winter session in the Knesset, Israel's parliament, in Jerusalem, Monday, Oct. 11, 2010. Netanyahu offered to renew a moratorium on Jewish settlement construction in the West Bank on Monday, but only if the Palestinians meet his demand to recognize Israel as a Jewish state. (AP Photo/Sebastian Scheiner)
— AP

Israeli Prime Minister Benjamin Netanyahu speaks at the opening of the winter session in the Knesset, Israel's parliament, in Jerusalem, Monday, Oct. 11, 2010. Netanyahu offered to renew a moratorium on Jewish settlement construction in the West Bank on Monday, but only if the Palestinians meet his demand to recognize Israel as a Jewish state. (AP Photo/Sebastian Scheiner)
/ AP

JERUSALEM 
Israeli Prime Minister Benjamin Netanyahu on Monday said for the first time that he would extend the settlement restrictions in the West Bank - if the Palestinians recognize Israel as the Jewish national homeland.

The idea, while innocuous to Israel's supporters, is widely seen as undermining the rights of Arab Israelis, and was immediately rejected by the Palestinians. But it could signal that Netanyahu is willing to bend and save a U.S.-led peace effort in exchange for a different concession.

The expiration of Israel's 10-month moratorium on new settlement building two weeks ago thrust the month-old U.S.-led peace negotiations with the Palestinians into crisis. The Palestinians are refusing to continue negotiating with Israel as long as settlement building continues, but Netanyahu has insisted the curb on construction was a one-time gesture.

The U.S. administration has been scrambling for weeks to find a creative way out of the quagmire and satisfy both sides and has put heavy pressure on Netanyahu to extend the slowdown, while offering a slew of incentives.

In a policy speech marking a new session of parliament, Netanyahu offered his own formula to move forward.

"If the Palestinian leadership would say unequivocally to its people that it recognizes Israel as the national homeland of the Jewish people, I will be willing to convene my government and ask for an additional suspension," he said, in a speech that was heckled by some lawmakers.

"As the Palestinian expect that we will recognize a Palestinian state as their national homeland, we are entitled to expect that they will recognize Israel as our national homeland," he said.

Netanyahu has made similar demands in the past, though he has never explicitly linked it to the settlement issue. On Sunday, Netanyahu's Cabinet passed a bill that would require non-Jewish immigrants to pledge allegiance to the "Jewish and democratic" state of Israel in order to receive citizenship.

The move is widely seen as undermining the rights of Israel's Arabs who make up a fifth of Israel's 7.5 million people.

The Palestinians also refuse to accept Israel as a Jewish state, saying it violates the rights of millions of Palestinian refugees scattered around the world. Instead, they say it is sufficient that they recognize Israel's right to exist.

Palestinian negotiator Saeb Erekat said the idea was "unacceptable" and accused Netanyahu of "playing games" in his address and said he saw no connection between Jewish settlements and Israel's national character.

"I don't see a relevance between his obligations under international law and him trying to define the nature of Israel," he said. "I hope he will stop playing these games and will start the peace process by stopping settlements."

Some 300,000 Jewish settlers live in the West Bank, in addition to nearly 200,000 Israelis living in Jewish neighborhoods in east Jerusalem.

The Palestinians claim both areas, captured by Israel in the 1967 Mideast war, as parts of a future independent state and say that continued Israeli settlement construction sends a message that Israel is not serious about reaching peace.